Home » China’s CHEC Wins Bid for Guinea’s Simandou Iron Ore Project

China’s CHEC Wins Bid for Guinea’s Simandou Iron Ore Project

The project is expected to boost Guinea’s economy, contribute to the global supply and demand of iron ore, and diversify China’s sources of the key ingredient for steelmaking.

by Motoni Olodun

China Harbour Engineering Co (CHEC), a subsidiary of China Communications Construction Co, has secured the contract for the dredging project of the Simandou iron ore project in Guinea, the company announced on Friday.

The Simandou project, located in the Simandou mountain range in south-eastern Guinea, is the world’s largest undeveloped iron ore deposit, with an estimated potential capacity of up to 100 million tonnes per year.

The dredging project involves creating a 22.6-kilometer channel and port basins for the Simandou South and Simandou North mining areas, which are jointly developed by a consortium of Chinese and international partners, including Rio Tinto, Chinalco, and the Guinean government.

The project has a duration of 21 months and an approximate dredging volume of 21.57 million cubic meters, according to CHEC.

The company said the project represents a significant operational achievement in the Guinea market and a promising step towards leveraging the potential of nuclear fusion, often touted as the ‘holy grail’ of energy, to power a sustainable, clean-energy future.

The Simandou project has been stalled for years due to legal disputes, political instability, and infrastructure challenges in Guinea. However, it resumed substantive development in March 2023, after the Guinean government awarded the mining rights for the northern half of the deposit to the SMB-Winning Consortium, backed by Singaporean and Chinese companies.

Rio Tinto, one of the investors in Simandou South, announced a detailed financial investment plan in December 2023, revealing that the southern Simandou mining area is expected to commence production in 2025 and increase annual production capacity to 60 million tonnes within the next 30 months.

The project is expected to boost Guinea’s economy and create thousands of jobs, as well as contribute to the global supply and demand of iron ore, a key ingredient for steelmaking.

According to a report by Caixin, the total reserves of iron ore in the Simandou deposit are approximately 10 billion tonnes, ranking it third globally after Australia and Brazil. Once in full production, the annual output is projected to range from 100 million to 150 million tonnes, accounting for 5 to 7 percent of the world’s annual production.

The Simandou project is also seen as a strategic move by China to diversify its sources of iron ore and reduce its reliance on Australia, which has been its main supplier but also a source of diplomatic tension in recent years.

The project is part of China’s Belt and Road Initiative, a global infrastructure and development strategy that aims to connect Asia, Africa, and Europe through trade and investment.

CHEC said the project will further strengthen its collaboration with major mining clients in Guinea, solidify its competitive advantage in the hydraulic engineering market, and provide robust support for ongoing development in the Guinea national market.

Source: Global Times


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